Meeting customer needs 1.1

Question 1

Definition of a mass market

Answer 1

Mass markets are aimed at the general poluation

Question 2

Definition of a niche market

Answer 2

A niche market is a subset of the main market and addresses a specialist need.

Question 3

2 advantages of mass market

Answer 3

Large volume of sales

Large scale production means economies of scale.

Question 4

2 disadvantages of mass market

Answer 4

lots of competition

Products need to be differentiated through markets which can be expensive.

Question 5

2 advantages of a niche market

Answer 5

The ability to charge a premium price

Small scale production means they are flexible to follow trends.

Question 6

2 disadvantages of a niche market

Answer 6

Risky
Demand may not be constant
Higher unit costs so no economies of scale.

Question 7

What is the definition of dynamic markets

Answer 7

A market that is subject to rapid and continuous changes. Companies have to predict any upcoming trends.

Question 8

Pros of online retailing

Answer 8

Flexible and easy to set up, can reach international markets

Question 9

Cons of online retailing

Answer 9

My not be accessible to older people
Risk of fraud and viruses
It is competitive.

Question 10

What is product orientation

Answer 10

This is when a business looks at the products or production process of a good - what the business is good at doing

Question 11

Market orientation

Answer 11

This is when a businesses considers customers needs and wants

Question 12

What is primary research. Provide examples

Answer 12

Collecting first-hand data, new data, specific to the needs of the business.
Focus groups, surveys + questionnaires, observations, interviews, test marketing

Question 13

What is secondary research. Provide examples

Answer 13

Gathering data that already exists - third parties

Trade publications, market reports, google, internal transactional data.

Question 14

Benefits of primary research

Answer 14

Detailed insights, privately kept and focused on research objectives

Question 15

Drawbacks of primary research

Answer 15

Time consuming and costly, risk of survey bias

Question 16

Drawbacks of secondary research

Answer 16

Quickly become out of date therefore useless, No tailored to business needs.

Question 17

Definition of Quantitative

Answer 17

Statistical and based upon data of large samples

Question 18

Definition of Qualitative

Answer 18

Beliefs, attitudes and intentions

Question 19

Benefits of quantitative data

Answer 19

Easy to analyse, numerical data provides insights into trends, compared with other data sources

Question 20

Drawbacks of quantitative data

Answer 20

Lacks reliability, no explanation on numerical data and doesn’t focus on expectations

Question 21

Benefits of qualitative data

Answer 21

Gives a clear insight to consumer needs and wants, important for new product developments and launches

Question 22

Drawbacks of qualitative data

Answer 22

Based on opinions so risky that it is not representative, expensive to collect and to analyse.

Question 23

Define market segmentation

Answer 23

The process of dividing potential customers into different groups based on demographic such as: age, gender, income.

Question 24

Importance of market segmentation

Answer 24

Choosing marketing mix, choosing promotion and market mapping.

Question 25

Benefits of market segmentation

Answer 25

Better matching to consumer needs and wants, enhanced profits, opportunities for growth.

Question 26

Benefits of secondary research

Answer 26

Free and easy to obtain

Good source of market insights

Question 27

What is market mapping?

Answer 27

Illustrating the range of positions that a product can take in a market bases on two dimensions that are important to customers.

Question 28

Give 4 examples of dimensions for market mapping:

Answer 28

Low price vs high price
Low volume vs high volume
Unhealthy vs healthy
Necessary vs complex
Low tech vs High tech

Question 29

Advantages for market mapping.

Answer 29

Helps spots gaps in the market
Analysing competitors and where they are positioned within the market
Encourages use of market research

Question 30

Disadvantages for market mapping

Answer 30

A gap in the market doesn’t mean there is demand for the product
No guarantee for success
How reliable is the market research?

Question 31

What is meant by adding value?

Answer 31

The difference between the price of the finished service. This is where value is added.

Question 32

How can you add value?

Answer 32

Build brand.
Deliver excellent customer service
Add product features and benefits that customers want
Operate efficiently.

Question 33

Benefits of adding value

Answer 33

You can charge a higher price
Differentiation between competitors
Protection against competitors offering lower prices
Focuses on businesses on its target market segment